The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has opened consultations with major industry stakeholders over a proposed domestic crude oil and gas swap arrangement designed to reduce supply costs and increase the volume of crude available to Nigerian refineries.

The proposed framework is also expected to strengthen compliance with the Domestic Crude Supply Obligation (DCSO) and Domestic Gas Supply Obligation (DGSO), while limiting the need to move crude across long distances to satisfy domestic supply requirements.

NUPRC Chief Executive, Oritsemeyiwa Eyesan, disclosed the development during a courtesy visit to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in Abuja on Thursday.

According to a statement issued on Friday by Eniola Akinkuotu, Head of Media and Corporate Communications at NUPRC, Eyesan said the proposed arrangement would allow producers and refiners to make better use of existing logistics and supply networks.

Under the proposed swap model, companies operating across the industry could potentially fulfil their domestic supply obligations through coordinated exchanges instead of physically transporting crude over lengthy distances.

The arrangement is expected to make domestic crude supply more efficient, reduce logistics-related expenses and improve the availability of feedstock for local refineries.

The consultation forms part of the Federal Government’s wider efforts to strengthen Nigeria’s domestic refining capacity and reduce the country’s dependence on imported petroleum products.

NUPRC said sustained cooperation among upstream, midstream and downstream operators would be essential to establishing an efficient framework that benefits producers, refiners and the broader Nigerian petroleum industry.

If implemented successfully, the proposed domestic crude and gas swap arrangement could help address logistical challenges in supplying refineries while also supporting compliance with Nigeria’s domestic supply obligations.

Source: MSME Africa Online